Date: 12/11/97 5:16 PM
Re: File # S7-26-97
Jonathan G. Katz, Secretary
Securities & Exchange Commission
Dear Mr. Katz:
Although I am now retired, for 15 years from 1979 to 1995, I served as Vice
President of Corporate Relations for McKesson Corp., San Francisco. In that
capacity, I was responsible for the company's corporate contributions program
and the McKesson Foundation. In addition, I have been and continue to be on
the boards of several non-profit organizations that solicit and receive
significant support from public corporations.
From this dual perspective, I am writing to express my opposition to the
draconian terms of this proposed legislation. These terms will, in my
judgement, lead to many public companies curtailing or eliminating their
support of non-profits. This legislation would be particularly harmful to
non-traditional or controversial non-profits, such as one which I serve as a
director that is involved in providing services to people with HIV and AIDS.
As an example, in 1990 McKesson was identified as one of the "most liberal"
corporate givers by the conservative Capital Research Center because included
in our $2.5 million of grants was a total of $10,000 for the American Friends
Service Organization and two organizations that provided planned parenting
services to the poor. At a recent meeting with the President of the McKesson
Foundation, I learned that this organization continues to harass McKesson for
its so-called liberalism. Fortunately, McKesson's Board has ignored this
harassment, but I wonder how many other companies would have the stomach to
deal with it as courageously.
Passage of this legislation would enable organized lobbies of any political
spectrum to impose their agendas on the corporate giving practices of public
companies. I can assure you based on my long corporate experience, companies
will drop their giving programs rather than subject themselves to such micro
management by shareholders.
Moreover, the record keeping and reporting requirements alone would further
erode corporate support for non-profits.
Given the miniscule percentage of corporate expenditures represented by
contributions programs, it is impossible to understand the need for such
disclosure in the proxy statement. Indeed, if shareholders are given the vote
on corporate contributions, why not also allow them to second-guess management
on such areas as R&D, advertising and marketing, capital expenditures and
hundreds of other categories of corporate outlays? Clearly, contributions and
all of these other items fall within the responsibility of management. If
shareholders don't approve of the way a company is dealing with these matters,
they are free to raise questions at the annual meeting, sell their shares or
seek to change management. To open the floodgate of shareholder micro
management is to invite corporate chaos.
Absent some overriding public purpose not apparent in this legislation, I
strongly urge the commission to reject this proposal.
At the same time, as a believer in disclosure, I would suggest that you
consider requiring public companies to disclose in the proxy the five largest
recipients of corporate contributions and to offer a full list to those
shareholders who request it.
Sincerely,
Marvin L.. Krasnansky
1140 Castle Rd.
Sonoma, CA 95476
(707) 996-8244